Lights, Camera, and More sells filmmaking equipment. The company offers three purchase options: (1) pay full cash today, (2) pay one-half down and the remaining one-half plus 10% in one year, or (3) pay nothing down and the full amount plus 15% in one year. George is considering buying equipment from Lights, Camera, and More for $100,000 and therefore has the following payment options:

	Payment Today	Payment in One Year	Total Payment
Option 1	$100,000	$0	$1000,000
Option 2	50,000	55,000	105,000
Option 3	0	115,000	115,000

A.) Assuming an annual discount rate of 11%, calculate the present value and the total cost.

(please show work)

	Payment Today	Present Value of Payment in One Year	Total Present Value (or Total Cost)
Option 1
Option 2
Option 3

B.) Which option's cost has the lowest present value?